U.K. FTSE100; WEEKLY OUTLOOK: 11MAY TO 15MAY 2009

FTSE100(4462)

Finally this index moved upto 200dma(4440) and gave a close above it.  Normally, we should wait for two weekly closes above 200dma to confirm signal of having left the worse behind.  The momentum is still strong and oscillators are just into the overbought zone(Early overbought condition is not a cause for worry but a signal to remain long for little more time with appropriate stop loss). Weekly oscillators are also in positive territory and pointing up.  All this implies that there is still enough steam left here to keep trading at higher levels in the days ahead.  But of course, the resistances are always the spoiler and we should be careful about booking some profits near resistances.

It formed intraweek peak at 4521, a little below its crucial resistance 4555. If this index manages to close above this area then the next target would be 4625.  Further a close above this mark would be met by resistance 4676, which surpassed would be a very positive signal of having broken out of its upper range. The medium term target of 4800 would come into the reckoning above here.  At the same time it would be prudent to remain vigilant as this index has also been rising vertically, though little slower than its Asian peers.

Supports are at 4344, 4282 and 4235.  Avoid fresh longs if closes below the first support.  But there could also be a rebound from 4280-4290 area which could be an opportunity to initiate fresh longs for short term gains.  4235 remains the stop loss.

The uptrend goes awry on a close below 4115 only.

The usual disclaimer applies.